using geothermal energy to comply with epa’s …geo-energy.org/pdf/guides_2015/1-epa 111(d)_geo...

UsingGeothermal

EnergytoComplywith

EPA’sCleanPowerPlan

AStateguidetounderstandingthe

potentialofgeothermaltechnologytoreducestateelectricityand

energysectoremissions

UsingGeothermalTechnologytoComplywithEPA’sCleanPowerPlan i

UsingGeothermalEnergytoComplywithEPA’sCleanPowerPlanAStateguidetounderstandingthepotentialofgeothermaltechnologytoreducestateelectricityandenergysectoremissions

GeothermalResourcesCouncil

GeothermalExchangeOrganization

GeothermalEnergyAssociation

December14,2015Preparedby:BenjaminMatek,RaniChatrath–GeothermalEnergyAssociationRyanDougherty–GeothermalExchangeOrganization

Additionalsupportprovidedby:PaulBrophy,BrianSchmidt,AnnaCarter,AndrewSabin,ElaineSison-Lebrilla,andRandyManion–GeothermalResourcesCouncil

Acknowledgements:SpecialthankyoutoMariaRichardsfromSouthernMethodistUniversity(SMU)forsharingSMU’sdataandresearchforthisproject.CoverPhotosCourtesyofNREL.AllmapsinstateguidescourtesyofDr.AnnaCrowell,UniversityofNorthDakota.

UsingGeothermalTechnologytoComplywithEPA’sCleanPowerPlan ii

ExecutiveSummaryOnAugust3,2015,PresidentObamaandEnvironmentalProtectionAgency(EPA)announcedafederalCleanPowerPlan. TheCleanPowerPlan (CPP) creates a flexible framework for statecontrolof strategies for reducingcarbonpollution -- the largest contributor toglobal climatechange and the cause of an array of public health problems. Under the CPP, geothermaltechnologies are eligible in a “Best System of Emission Reduction” (BSER) strategy. Wheresuitable geothermal resources are available, states can build geothermal power plants, andexpand direct uses of geothermal heat. And geothermal heat pumps can contribute todemand-sideenergyefficiencyprogramsineverystate.Fossil fuel power plants are the largest source of carbon to our atmosphere. Geothermalresources suitable for generating electricity, primarily found in the Western United States(U.S.),canbeextremelyvaluablesourcesofclean,reliablepower.Geothermalenergyprovidesafirmbutflexiblegenerationresourceinapowersupplymarketfloodedwithotherrenewable,butintermittent,generationtechnologies.Inadditiontoprovidingasecureindigenoussupplyofelectricity, transmissionsystemreliability,anda low-cost fixedpriceofpower,geothermalplantshaveverylowtononexistentcarbonemissions.InCalifornia,forexample,TheGeysersand Imperial County geothermal plants supply baseload electricity while offsetting theemissionsof11.6billionpoundsofcarbondioxideannuallythatwouldotherwisebeemittedbyfossilfuelplants.Thatisequivalentingreenhousegasemissionstotakingmorethan1,050,000carsofftheroad.Direct-uses of heat and hot water from geothermal resources can be used for a number ofpurposes as demand-side efficiency technologies, including cooking, pasteurizing, spaceheating,biofuelproduction,soilwarming,heatingandcooling,vegetabledrying,snowmeltinganddeicing,lumberorcementdrying,pulpandpaperprocessing,aquaculture,soilsterilization,fabricdrying,refrigerationoricemaking,andgreenhouseheating.Usingdirect-usegeothermalsystems for these commercial purposes instead of fossil fuels helps states further reduceemissions.Lastly,geothermalheatpumps(GHPs),alsoknownasground-sourceheatpumps,usethenear-constanttemperaturesandtheinsulatingpropertiesoftheEarthjustafewfeetundergroundanddonotrequireaccessingadeepgeothermalreservoir.GHPsareamongthemostefficientand comfortable heating and cooling technologies currently available and their use isburgeoningnationwide.EnergyStar-certifiedgeothermalheatpumpsareover45percentmoreenergyefficientthantraditionalsystemspoweredbyfossilfuels.GeothermalHeatPumpsareclean,quiet,createnoindoorpollution,anduse25%to50%lesselectricitythanconventionalheatingorcoolingsystems.The policy and regulatory structures discussed more fully in this document can speedimplementationofthesegeothermaltechnologiestocost-effectivelyachievestateCPPcarbonreductionandotherstatecleanairprogramgoals.

UsingGeothermalTechnologytoComplywithEPA’sCleanPowerPlan iii

UsingGeothermalTechnologytoComplywithEPA’sCleanPowerPlan iv

ContentsExecutiveSummary.......................................................................................................................................................iiIntroduction..................................................................................................................................................................1SECTION1:GeothermalElectricity..............................................................................................................................3

Environmental&EmissionBenefits.........................................................................................................................4Employment&EconomicBenefits...........................................................................................................................5Firm&FlexiblePowerPotential...............................................................................................................................5CostofGeothermalPower.......................................................................................................................................6

ProjectCost..........................................................................................................................................................6PowerPurchaseAgreements...............................................................................................................................7

RecommendedGeothermalStatePolicies&Practices............................................................................................7Research&RiskReduction..................................................................................................................................7StateAgencyPolicy&Law...................................................................................................................................7PublicUtilityCommissions,Contracts&theMarket...........................................................................................7ValuingGeothermalPower..................................................................................................................................8

SECTION2:GeothermalDirectUse.............................................................................................................................9ValuesandBenefits................................................................................................................................................10Economics&Costs.................................................................................................................................................10CaseStudies...........................................................................................................................................................11

KlamathBasinBrewingCo.................................................................................................................................11ElkoNevadaDistrictHeatingSystem.................................................................................................................11Boise,IdahoGeothermalHeatingDistrict.........................................................................................................12

SECTION3:GeothermalHeatPumps........................................................................................................................13ValuesandBenefits................................................................................................................................................14RecommendedNewGeothermalStatePolicies&Practices.................................................................................15GeothermalHeatPumpCosts................................................................................................................................16CaseStudies...........................................................................................................................................................17

IKEAinKansasCity&DenverArea....................................................................................................................17DOCUMENTANDFACTSHEETREFERENCES................................................................................................................18APPENDIXA:IllustrationsofGeothermalPowerTechnologyTypes.........................................................................21APPENDIXB:State-SpecificGeothermalPotential.....................................................................................................24

Arizona...................................................................................................................................................................24California................................................................................................................................................................24Colorado.................................................................................................................................................................24Idaho......................................................................................................................................................................24Montana.................................................................................................................................................................24Nevada...................................................................................................................................................................24NewMexico...........................................................................................................................................................24Oregon...................................................................................................................................................................24Utah........................................................................................................................................................................24

UsingGeothermalTechnologytoComplywithEPA’sCleanPowerPlan 1

IntroductionOn August 3, 2015, President Obama and the Environmental Protection Agency (EPA)announced the Clean Power Plan. The Clean Power Plan will reduce carbon pollution frompowerplants, thenation’s largest sourceof carbonpollution that leads toanarrayofpublichealthproblemsandexacerbatesglobalclimatechange.Onthesamedate,theEPAissuedfinalCarbonPollutionStandardsfornew,modified,andreconstructedpowerplantsandproposedaFederalPlanandmodelruletoassiststatesin implementingtheCleanPowerPlan.Thesearethefirst-evernationalstandardsthataddresscarbonpollutionfrompowerplants.UndertheCleanPowerPlan,statesmustdevelopand implementplanstocomplywiththeserules toensure thepowerplantswithin their statemeet their state-specific goals for carbonpollutionby2030.ThroughouttheU.S.,geothermalenergyisanexcellentwaytocomplywithEPA’scarbonreductiongoals.Tappingintoenergygeneratedfromtheearth’scrustisaclean,emissionfreeandreliablewaytogenerateelectricityateconomicalratesacrosstheU.S.withminimalimpacttotheenvironment.To comply, statesmay choose between two types of plans. Targets are expressed as eitheremissionrateormassofCO2reduced.

o Emission standards plans include source-specific requirements ensuring all affectedpowerplantswithinthestatemeettheirrequiredemissionperformance.

o Statemeasuresplansincludeamixtureofmeasuresimplementedbythestate,suchasrenewableenergystandardsandprogramstoimproveresidentialenergyefficiencythatarenotalreadyincludedasfederallyenforceablecomponentsoftheplan.

Inbothplantypes,statescanusegeothermalresourcesoutlinedintheBestSystemofEmissionReduction(BSER)bybuildingpowergenerationfacilitieswheretheseplantsareavailableorbyimplementingdirectuseandgeothermalheatpumpdemand-sideenergyefficiencyprograms.If states are to choose demand-side efficiency measures, geothermal direct-use and heatpumpsareanexcellentoptionforreducingconsumptionofelectricityforheatingandcooling.Geothermalheatpumpsarecost-effectiveandproven technologies that reduce theneed formorecarbon-intensivefuelstocoolorheathomesandbusinesses.Whenlow-temperaturegeothermalresourcesareavailable,geothermaldirect-usetechnologycanbeusedforcooking,pasteurizing,spaceheating,biofuelproduction,soilwarming,heatingand cooling, vegetabledrying, snowmelting anddeicing, lumberor cementdrying, pulp andpaperprocessing,aquaculture,soilsterilization, fabricdrying,refrigerationor icemaking,andgreenhouseheating.Thenumberofstatesthathavehigh-temperaturegeothermalresourcesateconomicaldepthscapable of generating electricity are more limited. In general, there are three types of


geothermal power conversion technologies, dry steam, flash, and binary (or organic Rankinecycle).DrySteamPlants:Indrysteamplants,naturallyoccurring,high-pressuresteamshootsupfromthedrysteamreservoirandusedtoruntheturbinesthatpowerthegenerator.Flash Plants: In flash plants, steam is separated from high-pressure and high-temperaturegeothermal fluids (hotwater and steam). The steam is delivered to a turbine that powers agenerator. The liquid (condensed from the steam after passing through the turbine) andremaininggeothermalwaterareinjectedbackintothereservoir.BinaryPlants:InbinaryorORC(i.e.,organicRankinecycle)plants,theheatistransferredfromthehotwatertoanorganicworkingfluidthathasaboilingpointlowerthantheboilingpointofwater. Theworking fluid is vaporized to run the turbine. The geothermalwater is neverallowedtoreachtheatmosphere-100%isinjectedbackintothereservoir.Inallsystems,theinjectedfluidisneverallowedtomixwiththeshallowgroundwatersystem.ForillustrationsofthesetypesoftechnologiespleaseseeAppendixA.AllofthesegeothermalsystemscanbeincludedaspartofEPA’sCleanPowerPlanandwillbeessentialformeetingcarbonreductiontargetsacrosstheU.S.Geothermalenergyisestimatedto currently supply 75,862 terrajoules per year (TJ/yr), or 21,074 gigawatt-hours per year(GWh/yr)ofheatenergyintheU.S.fromdirectheatusesandgeothermal(ground-source)heatpumps.The total lowtemperature,heat resourcecapacityof theU.S. isestimated toexceed17.5gigawattsthermal(GWt).1Forgeothermalresourcescapableofproducingelectricity,theUnitedStatesGeologicalSurvey(USGS)estimatesthereareover9GWeofidentifiedresources,andover30GWeofunidentifiedresources across 13 western states.2If Enhanced Geothermal Systems (EGS), co-production,andgeo-pressuredsystemsareincluded,theseestimatesexpandtoanotherdozenstatesandnearly quadruple. In places such as California, geothermal power already contributessubstantially to state climategoals. Forexample, theGeysersand ImperialCounty,Californiageothermal plants supply baseload electricity while offsetting the emissions of 11.6 billionpoundsofcarbondioxideannuallythatwouldotherwisebeemittedbyfossilfuelplants.Thatisequivalentingreenhousegasemissionstotakingmorethan1,050,000carsofftheroad.3

1Boyd,etal.,2015.2Williams,etal.,20083McGuire,etal.,2015.


SECTION1:GeothermalElectricity

GeothermalElectricity

Section1


Environmental&EmissionBenefitsGeothermal power generates extremely low emission rates, especially when comparedwithtraditional fossil fuels that involve direct combustion of fuels. Binary power plants, whichrepresent most of the geothermal plants that have come online recently, have near-zerogreenhouse gas emissions and minimal particulate matter emissions.4When considering lifecycleemissions,ArgonneNationalLaboratoryfoundbinarygeothermalpowerplantstobeoneofthecleanestformsofenergy.5Flashanddrysteamgeothermalpowerplantsalsorepresentasignificantimprovementovercoalandnaturalgas,asshowninTable1.6Ingeneral,emissionsfromgeothermalplants,whentheydooccur,areseveralordersofmagnitudelessthanthoseoffossilfuelfacilities.WithintheU.S.,geothermalplantsareusuallyfoundinregionsoftectonicandvolcanicactivityandcanbeco-locatedwithnaturalhotspringsandsimilarmanifestationsthatnaturallyreleasegreenhouse gases. The naturally occurring emissions from these from these features oftenexceedsthosefromthegeothermalplants.7

Table1:EstimatedEmissionLevelsbyPollutantandEnergySourceofPowerPlants8[lbs/MWh] DrySteam* Flash* Binary NaturalGas* Coal*

CO2 60 396 0 861 2200CH4 0 0 0 0.0168 0.2523PM2.5 0 0 0 0.1100 0.5900PM10 0 0 0 0.1200 0.7200SO2 0.0002 0.3500 0 0.0043 18.75

*Note:TheseestimatesareforatypicalCaliforniageothermalpowerplant.ThefossilfuelemissionestimatesareforatypicalfossilfuelfiredpowerplantintheU.S.Theemissionmostfrequentlyassociatedwithgeothermalpowerproductionishydrogensulfide(H2S),agasthatoccursnaturallyinvaryingconcentrationsingeothermalsystems.H2Soxidizesinto sulfur dioxide and sulfuric acid when released into the atmosphere. Known for itsdistinctive“rottenegg” smell,hydrogensulfide isanatural componentofmanyvolcanicandgeothermal systems. Today, hydrogen sulfide abatement systems, such as LO-CAT andStretford, are used extensively throughout the industry and have demonstrated a removalefficiency of more than 99.9%9. Through such systems, hydrogen sulfide is converted toelementalsulfur,whichcanbeusedasafeedstockforfertilizersorasasoilamendment.Not only are emissions minimal to non-existent but the land footprint is tiny as well.Geothermalpoweruses very little landcompared tootherenergy sources,particularlywhenweighed against other renewables. Unlike power generated from solar, wind, and biomasssources,whicharepredicatedupongatheringdiffuseambientenergyoverlargetractsofland,

4(Matek,2013)5(Sullivan&Wang,2013)6(Matek,2013)7(Bertani&Thain,2002)8(Matek,2013)9(Nagl,2009)


geothermalexploitsaconcentrated,subterraneanresource.Geothermalplantfacilitiesuselesssurfaceareaforcomparablelevelsofpower.Arecentpaperestimatestheintensityoflanduseassociatedwithvariousenergysourcesbasedon the anticipated state of technology in the year 2030. Assuming 8,766 hours in a year,geothermalpower’sestimateduseof66km2/GWis lowerthancoal(85),solarthermal(134),natural gas (163), solar voltaic (323), petroleum (392), hydropower (473), wind (632), andbiomass(4,760).10Geothermalresourcesdonotrequiretransportationoffuels longdistancesby pipeline, highway, rail, or across oceans in tankers. They are homegrown resourceswithpowerplantfacilitieslocatedatthereservoirsitesupplyingelectricitytoregionalgrids.

Employment&EconomicBenefits• Geothermal plant construction employs about 3.1 person-years per MW; the

manufacturingoftheequipmentrequiresanadditional3.3person-yearsperMW.• Geothermalpowerplantsemployabout1.17personsperMWateachoperatingpower

plant. These are permanent jobs that last the entire 30-50 year lifetime of the powerplant.

• Intotal,addinggovernmental,administrative,andtechnicalrelatedjobs,thegeothermalindustryemploysabout2.13personsperMW.

• Anaverage50MWfacilitywillcreatepermanentemploymentforabouta100people.• In 2013,U.S. geothermal power producers paid $29million dollars in annual property

taxes,including$21milliondollarstotheStateofCaliforniaalone.• Geothermal paid about $26 million in rents and royalties to state, federal and local

governmentsnationwide in2014ofwhichonequarter is returnedtobenefitstateandlocalcountygovernments.

• Overthecourseof30to50yearsanaverage20MWfacilitywillpaynearly$6.3to$11milliondollarsinpropertytaxes.

Firm&FlexiblePowerPotentialWithwell-structured and appropriately priced contracts, geothermal plants canprovidebothflexible and baseload power production. Although traditionally operated as a source ofbaseload power, the advancement of power plant and control technology allow geothermalpower plants to work in several different modes, such as grid support, regulation, loadfollowing, spinning reserve, non-spinning reserve, and replacement or supplemental reserve.Thesemodesarecommonlyreferredtoas“ancillaryservices,”whichareperformedbyentitiesthat generate, control and transmit electricity in support of the basic services of generatingcapacity,energysupplyandpowerdelivery.Thefutureelectricitygrid,dominatedbyvariableenergyresources(primarilywindandsolar),willneedtechnologiesthatcanbebothbaseloadandflexible.

10(McDonald,Fargione,Kiesecker,Miller,&Powell,2009)


While most geothermal plants generate baseload electricity, flexible geothermal operationshavebeendemonstratedatseveralprojects, includingthePunaGeothermalVentureplant inHawaii which generates 38MW, and has contracted 16MW of flexible capacity. This plantprovidesancillary services for grid support that are identical to thoseof theexistingoil-firedpeakgeneratingresourcesontheBigIsland.Thisplantisconsideredafirst-of-its-kindandcouldbe expanded to other facilities given the right contracts and retrofits. 11 Additionally,geothermalplants at theworld’s largest geothermal field– TheGeysers, located innorthernCalifornia–haveoperated invariousmodes, includingtraditionalbaseload,peakingand loadfollowing.TheflexiblemodeswereofferedasanappropriateresponsetotheneedsofoneoftheutilitiespurchasinggeothermalpowerfromTheGeysers.Flexibleoperationsceasedintheearly1990sinresponsetoacombinationoflowdemandandlowercostsofgenerationwithintheutility’ssystemfromhydro,coal,andnaturalgaspowerplants.12In general, it’s currentlymore economical for geothermal developers to operate geothermalplantsunderbaseloadpowerpurchaseagreementsfortheirplants.However,somesuggestionsinthegeothermal industryonhowtorespondtoutilitiesrecentcallforgeothermalpowertobesuppliedinmoreflexiblecontractsincludethefollowing:

• Utilitiescouldbuycapacityfromageothermalplantandthenpurchaseenergyastheyregulate its output, within the plant’s technical limits. Flexible contracts with pricingstructuresthataccountforgeothermalenergy’suniquecapitalstructurewouldenableflexiblegeothermalpowertocompetewithnaturalgas.

• Utilizingstoragetechnologiesforgeothermalpowerplantstostorepowerandreleasetheelectricityasneeded,insteadofconstantlyexportingelectricitydirectlytothegrid.13

• Ancillaryservicesinthepasthavetraditionallybeenprovidedbyfossilfuelsourcessuchasnaturalgas.Inmanycasesthesecontractsareveryhighlypricedduetospotmarketgaspurchases. Renewablescanofferamoreeconomicalalternative,sincethere isnovolatilityinfuelpricing.

CostofGeothermalPower

ProjectCostThecostofatypicalgeothermalpowerprojectishighlydependentonseveralfactorsincludingdrilling depth, geology, temperature and project size. However, a typical 50-MW greenfieldprojectinageothermalfieldwithwellsofaround2km(6500ft)indepthwillcostbetween2.8-5.5millionUS$/MW.Thisincludesthecostofeverythingfrompreliminarysurveystoturbineconstruction.14Atypicalnew25-35MWprojectintheU.S.costsbetween$125-150million.Acommonpracticeistobuildexistingprojectsincrementally,eitherbyaddingmorewellsandmore turbine generator modules to an existing (brownfield) power project, or adding a“bottoming cycle” unit to the plant using existingwells. The advantage of this development

11(Nordquist,etal.,2013)12(Cooley,1996)13(McGrail,2015)14(Gehringer&Loksha,2012)


approachisthatitimprovesthesustainabilityofthereservoirandisoftenalowercostwayofbuilding geothermal projects. If built in this manner, projects fall on the lower end of thespectrumoftenrangingfrom1.5-4millionUS$/MW.15

PowerPurchaseAgreementsData collected by GEA and the US DOE Geothermal Technology Office (DOE) shows thatprojectsintheU.S.havesignedpowerpurchaseagreements(PPAs)withutilitiesinthelasttenyearstypicallyrangingbetween$17.76-$101.95perMWh.Thesepowerpurchaseagreementsarenormallyforbase-loadpowercontracts.Thelow-endpricewasforanolder,existingfacilityandis likelybasedonCalifornia’sShortRunAvoidedCost. Thehigh-endpricesarefornewerbinaryprojectsthatwerebuiltonlower-temperatureresourcesthatweresmallerinsize.

RecommendedGeothermalStatePolicies&PracticesForanystateutilizinggeothermalenergyordirectusetocomplywithEPA’s111(d)CleanPowerPlan, the GEA recommends the following practices be implemented to ensure smooth andexpedientdevelopmentofthetechnology.

Research&RiskReduction• Publishpublicexplorationdatainthepublicdomainforcompaniestouseandverify.• Initiateactiontodevelopresourceinformation,eitherasdonorsorgovernments.• Donorsandgovernments(bothnationalandlocal)mayneedtoparticipateindrillingrisk.• Support research in energy storage schemes to further enhance grid stability whilecreatingagoodeconomicenvironmentforgeothermalandotherrenewables.

StateAgencyPolicy&Law• Coordinate institutions intowhat iseffectivelyonebodygoverninggeothermalresourcedevelopment.

• Minimize the number of agencies or institutions involved with regulation—“one-stopshopping”istheidealmodel.

• Developinstitutionalcapacityandcapability.• Develop laws and regulations that create an investment environment where risk andreturnarematchedforgeothermaldevelopment.

• Developers who make significant investments or resource discoveries on state landsunderexplorationpermitsshouldhavearighttoanegotiatedlease,orrightofmatchinghighbidsunderpublicauctions.

• Developers of public lands should have a limited time to act on permits, or leases canterminate.

PublicUtilityCommissions,Contracts&theMarket• Take the current electricity market into account. There must be a market for theelectricity.Generationgrowthmustbeaccompaniedbygridgrowth.

15UnpublishedGEA&DOEdata.


• Promotetheuseofdemand-side(electricalequivalent)geothermalsolutions(geothermalheatpumpsanddirectusesofthermalwaters)todisplaceelectricitygenerationsourcesthatemitlotsofcarbondioxide.

• WorkwiththestatePublicUtilityCommissionstoensurethatutilitiessolicitgeothermalpower and offer PPAs that attract geothermal developers. These contracts shouldrecognizealltheuniquevaluesgeothermalpowercanprovideanelectricitygridsystem,includingancillaryservice,firmandflexiblepower,reliabilityandreductionoflinelossesneartheendsofthelines.

• Understand that geothermal is traditionally andmost efficiently operated as base-loadpower (providing grid stability for states with intermittent renewables), but also canoperateinflexiblemodes(forloadfollowing).

ValuingGeothermalPower• Whengeothermalplantsareintendedtobeoperatedinaflexible, load-followingmode,contracts should be negotiated to include payment schedules that define the price ofpower inresponsetoadispatchsignaltransmittedbythe independentsystemoperatororotherload-servingentity.

• To increase the ability of geothermal plants for frequency regulation (i.e., rampinggeneration assets upor downover a periodof a fewminutes), powerpricing in futurecontractsshouldbenegotiatedto includepaymentsspecificallyforfrequencyregulationservices.

• When comparing geothermal power to other renewables during procurement, it’simportant to consider all the values of geothermal power, such as: ancillary services,geothermal’sminimal integrationcost,environmentalattributes,andeconomicbenefitsthatdistinguishitfromtheintermittentrenewablesandfromcarbonemittingresources.


SECTION2:GeothermalDirectUse

GeothermalDirectUse

Section2


ValuesandBenefitsGeothermalresourceshavebeenuseddirectly, for theirheat forcenturies.Themost famousexamplesmightbetheRomanbathhousesofEuropebuiltthroughouttheRomanEmpire. Inmodern direct-use systems, awell is drilled into a geothermal reservoir to provide a steadystreamofhotwater.Thehotwaterisbroughttothesurface,andamechanicalsystem—piping,aheatexchanger,andcontrols—deliverstheheatdirectlyforitsintendeduse.Projectscanbescaled to any size, and can range from an individual home, to a single greenhouse oraquaculturepond,toalargedistrictheatingsystem.

These applications decreaseelectricity demand by using analready hot and sustainableresource rather than convertingelectricity or fossil fuels into heat.The use of low- to moderate-temperature fluids, typically 380C(1000F) to 1500C (3020F) are usedfor direct use projects.Approximately 85% of identifiedresources in the U.S. are below930C. These resources are morelikely to be located near potentialusers than traditional powerresources since they are morewidespread, often discoveredduring conventional water welldrilling, and are designed withconventional off-the-shelfequipment.

The main uses of direct-use technology is industrial applications, agricultural drying, districtheating,spaceheating,greenhouses,aquaculture,resortsandspas,snowmelting,andcooling.Currently in theU.S. thereare19geothermaldistrictheatingsystemswithseveraladditionalunderconstruction,over2000 individualheatedbuildings,7 industrialandagriculturaldryingstations, 45 greenhouse complexes, 51 aquaculture operations, 242 resorts and spas, and 6snowmeltingprojectstheusegeothermaldirect-usetechnology.16

Economics&CostsEverygeothermaldirect-useprojectisuniqueandshouldbecustomengineered.However,thatdoesnotaddsubstantiallytotheircost.Thesesystemsareoftennotthatcomplicatedandcanbebuiltwithoff-the-shelfcomponentsandequipmentcommonlyavailable.Itisthereforehard

16(ToniBoyd,2015)

Ball State Central GHP. Photo courtesy of Geothermal Exchange Organization


to generally apply standard costs for all systems as can be done for electricity or fossil fuelsystems. The economics of a project often depend on the user’s needs, geothermal fluidtemperaturesandflowrates,priceoftheequivalentfossilfuelheatingsources,andavailabilityofgovernmentincentives.Generally,thelargerthesystemneeded,thehigherthepricewillbeforanalternativefossilfuelsystemforthesamepurpose.Furthermore,thebetterthequalityofthegeothermalresourcesnearby,themoreeconomicthesesystemsbecome.

Table2:TypicalCostsofExampleGeothermalDirect-UseSystemsbyType17

ApplicationCapital$/kW

Cost/year$/kWyr

O&M$/kWyr

Total$/kWyr

TypicalCapacityFactor

UnitCostcents/kWh

ResidentialSpaceHeating*

800 71.1 7.1 78.2 0.29 3.08

SpaceHeating* 500 44.4 4.4 48.8 0.25 2.23DistrictHeating 650 57.7 5.8 63.5 0.30 2.42GreenhouseHeating 250 22.2 2.2 24.4 0.25 1.11AquaculturePondHeating

200 17.8 1.8 19.6 0.69 0.32

Note:Basedon30-yearlifeat8.0%interestandO&Mat10%ofcapitalcost.Theabovecostsincludeashallowwell(<984ftor300m)andnoretrofitcosts;however,costcanvarybyasmuchas100%dependingonthelocalgeology,hydrology,buildingconstruction,andinfrastructure.*Assumesoneproductionandoneinjectionwellforasinglebuilding**Heatpumpfiguresareconsideredonlyfortheheatingmodeandthecapacityfactorisanation-wideaverage.

CaseStudies

KlamathBasinBrewingCo.The Klamath Basin Brewing Co utilizes a local geothermal district heating system in KlamathFalls,Oregon.Onpeak,thecompanyusesabout1,700thermsofgeothermalenergyamonthatacostof$1,360.ThissystemsavesKlamathBasinBrewingabout$1,190amonthduringtheon-peakseason.Duringtheoff-peakseason,thecompanysavesabout$300amonth,comparedtogeneratingthesameheatwithfossilfuels.18

ElkoNevadaDistrictHeatingSystemThesysteminElko,Nevada,firstbeganconstructionin1982.Itcurrentlyservices19residentialandcommercialcustomersincludingacommercial laundry,asewagetreatmentplant,andanindustrialpark.Thesystemcostabout$1.4million.Thecustomersarechargedabout$1.50per1000gallonsofwaterusepumpedthroughthesystem.Thesechargesequatetoabout30%ofthecostofnaturalgas.19

17(Lund,2015)18(Lund,2015b)19(Lund,2015a)


Boise,IdahoGeothermalHeatingDistrictBoisePublicWorksDepartmentadministersBoise’sGeothermalHeatingDistrict.Thissystemisthe largestandoldestdirect-usesystemintheU.S.Four independentheatingdistrictssupplyenergy-efficientheattoover65businessesinthedowntowncorearea.Thecostofextendingthesupplyandreturnlinesisabout$50,000-$85,000percityblockinBoise.20

20(Neely,Galinato,&Johnson,2006)


SECTION3:GeothermalHeatPumps

GeothermalHeatPumps

Section3


ValuesandBenefitsAccording to the Department of Energy, buildings are the largest single sector of total U.S.energy consumption. The buildings sector accounted for over 40% of primary energy use in2010 and consumes approximately one third more energy than either the industrial ortransportation sectors.21 Some 60% of the energy used in buildings is for “thermal loads.”Thermalloadsaretheamountofenergyneededtobeaddedorremovedfromaspacebytheheating,ventilationandairconditioning(HVAC)systemtokeeptheoccupantscomfortable.AthirdofthatU.S.thermalloadenergy–over3quadrillionBTUs–issatisfiedwithelectricity.

Given the high proportion ofenergy and electricity used bybuildings in the U.S.,Geothermal Heat Pumps(GHPs) offer a unique andhighly efficient renewableenergy technology for heatingand cooling. GHPs use thenatural insulating propertiesunderground, the latent solarenergystoredintheearthand,below20ft,geothermalenergy

tomeetthethermalneedsofabuildingthroughaprocesscalled“geothermalexchange.”Bydrawing on this stored and ever-regenerating solar and geothermal energy the spaceconditioning requirements of a building can be met with a fraction of the energy normallyrequiredbyconventionalHVACequipment.Theearthiswarmerinwinterthanistheair,andcoolerthantheairinsummer.MostGHPsworkbycirculatingwaterinaclosedsystemthrougha“loopfield”ofdurable,high-density polyethylene pipe installed horizontally in the ground adjacent to or even verticallybeneathabuilding.ThereareothertypesofGHPsystemsthatusealoopfieldplacedinwaterwellsorabodyofwatertoachievethesamegeothermalexchange.AnotherexampleofaGHPisa“directexchange”system,whichusesasmallerloopfieldofcopperpipethroughwhicharefrigerantinsteadofwateriscirculated.AllofthesedifferenttypesofGHPsystemsaresimilarinthattheyutilizethestabletemperatureoftheearthtomeettheheatingandcoolingneedsofabuilding.Inthewinter,storedthermalenergyisdrawnoutoftheearthandusedtomeetthebuilding’sheatingneedsand inthesummer,thatprocess isreversedandbuildingheat isrejectedtotheearth.According to the U.S. Environmental Protection Agency (EPA), “Geothermal heat pumps areamongthemostefficientandcomfortableheatingandcoolingtechnologiescurrentlyavailable. . . Energy Star-certified geothermal heat pumps are over 45 percentmore energy efficient

21(U.S.Dept.ofEnergy,2012)


thanstandardoptions.”22AndaccordingtoDOE,“ThebiggestbenefitofGHPsisthattheyuse25%to50%lesselectricitythanconventionalheatingorcoolingsystems.ThistranslatesintoaGHPusingoneunitofelectricitytomovethreeunitsofheatfromtheearth.”23Byusingtheearth’sfreerenewablethermalenergy,GHPscanhelplessentheloadonelectricalgrids. This fact is especially true on hot summer days when consumer demand for airconditioningspikesandpowergenerationresourcesarestrained. GHPsflattenpeakdemandand reducepeak-load generation capacity thatmust be installed adding stability to the grid.Peakenergyloadsarethemostexpensive.Inadditiontotheeffectsontheelectricalgrid,GHPssignificantlyreducecarbonemissions.A2010studyfromOakRidgeNationalLaboratoryshowedthataggressiveretrofittingofallsingle-

family homes across the countrywithGHPswouldavoidtheneedtobuild up to 48% of new electricgeneration capacity projectednationwide by 2030. 24 Such adeployment of GHPs would save$38 billion annually on consumerutility bills and slash projected CO2emissions by 45%. The Oak Ridgestudy found that one ton (12,000BTU/hr) of GHP capacity over a 20year operating cycle avoids 21metric tons of CO2 emissions. Thesignificant emissions reductioncapability of GHPs makes them atechnology type uniquely suited to

meetthegoalsofstatesseekingpoliciestocomplywithEPA’s111(d)CleanpowerPlan.

RecommendedNewGeothermalStatePolicies&PracticesStateshaveanumberofoptionsavailable forcompliancewith theEPA’s111(d)CleanPowerPlan.GHPsareoneofthemostapplicabletechnologiesforcomplianceastheyareademand-sideefficiencytechnologythatcanbedeployedinall50states,andhaveaproventrackrecordasthemostefficientandrenewableheatingandcoolingtechnology.ThefederalgovernmentrecentlyrecognizedthethermalenergyutilizedbyaGHPasasourceofrenewableenergyandinstructed government agencies to consider their use a method of meeting energy savingsgoals.StateswishingtoincorporateGHPtechnologyintotheirplanforCPPcomplianceshouldadoptthefollowingrecommendations:

22(EnergyStar,2015)23(USDept.ofEnergy,2015)24(XiaobingLiu,2010)


• AmendstateRenewableEnergyPortfolioStandardstorecognizetherenewablethermalenergyproducedbyGHPsandcreateprogramstomeasureandcalculatetheaggregateofthisrenewableenergyforallcommercialandresidentialinstallations.InstateswhereGHPsarenotincludedintheEnergyEfficiencyPortfolioStandard,thestandardshouldbeamendedtoincludeGHPs.ByaddingGHPstothesestandards,statesareabletomoreeasilymeettheirsRPSgoalsaswellasCPPtargets.

• RecognizetheuniqueabilityofGHPstosignificantly lowerelectricutilitypeakdemand.Byderivingthebulkoftherequiredthermalenergyforheatingfromthelatentsolarandgeothermal energy stored in the earth,GHPs reduce the burdenon power generationfacilities.Andinthecoolingmode,GHPsrejectabuilding’sheattothegroundinsteadofoutside air, cutting consumption and decreasing demand on strained generationfacilities.OnerecentDOEstudyshowedthatahomewithaGHPsystemgets75%ofitsheatingenergyfromtheearth.

• RecognizethecarbonemissionsreductionattributabletoGHPs.TheDOEhasperformedstudies that verify the unique ability of GHP technology to reduce greenhouse gasemissions. Widespread GHP adoption can dramatically diminish the level of carbonreleasedintotheatmosphere.

• Encourage public utilities to support GHP deployment through on-bill financingprograms, special rate designs, and homeowner rebates. With focused incentives,utilitiesareabletodeliverrealandlastingsavingstohomeownersandbusinesseswhilemeetingtheirowndemandreductiontargets.

• RecognizethelargepercentageofenergythatisdevotedtoHVACapplicationsandseektoimplementthemostefficient/renewablesolutionsavailable.

GeothermalHeatPumpCostsGeothermalheatingsystempricescanvarydependingon the typeofgroundheatexchanger(usually vertical or horizontal), geographic location and on-site geological conditions. Onaverage,atypicalhomeof2000squarefeetwillrequire4tonsofheatingandcoolingcapacitywithanaveragesysteminstallationcostbetween$5,000and$7,500perton.Anotherwaytoexpresscostwouldbebythetypeofheatpumpsysteminstalled.Geothermalheatpumpcostsfora4-tonunit:

• Closedloopwatertowater= $34,000($8,500/ton)• Openloopwatertowater= $28,000($7,000/ton)• Closedloopwatertoair= $28,800($7,200/ton)• Openloopwatertoair= $22,000($5,500/ton)• Directgeoexchange= $16,000($4,000/ton)

These are average numbers and will vary depending upon local drilling or excavation costs.WatertowaterGHP installationcosts includeradiantflooring.Closed loopwatertoair is themostfrequenttypeofinstallation(costshownincludesductwork).Openloopwatertoairisatypical “pump and dump” system. Direct geoexchange uses copper pipe underground, butexcavation/drillingcostsarelower.


Ingeneralfourfactorsdeterminethecostofaheatpumpinstallationinahomeorcommercialbuilding.25

1. SizeoftheHome/Building–Thelargertheareacovered,themoreheatingandcoolingthebuildingwilldemand.

2. Size of the Heat Pump - Based on the size of the home, insulation, and climate theamountofheatingandcoolingneedediscalculated,whichinturnenablesacontractortocalculatethesizeoftheheatpump.

3. Sizeof theLoopField -Thesizeofthesystem(3-ton,4-ton,etc.)alongwiththe localclimatewilldictatetheamountofpipethatneedstobeinsertedintotheearth.

4. Usability of Current Ductwork - Inmost cases, existingductwork requires little tonoadjustment to be suitable for geothermal heating and cooling. However, if existingductworkisnotinplace,thanthehomeownerorbusinessownerwillneedtoincurthefullexpenseofinstallingit.

CaseStudies

IKEAinKansasCity&DenverAreaIKEA globally by January 2015, installed more than 300,000 solar panels, owns/operatesapproximately137windturbines inEurope,andhasgeothermalsystemsatapproximately50locations.AttheDenverlocationinCentennial,Colorado,IKEAdrilled130boreholestoadepthof500feet.Thecentralplantincludesten,35-tonwater-waterheatpumpsthatdriveavariableairvolumesystemformostofstoreandnine1,500gallonicestoragetanks.AttheKansasCitylocation inMerriam,Kansas,180boreholesweredrilledtoadepthof600 fet.Thesystem inKansasCity is thebuilding’sprimary sourceofheating and cooling. These two systemsare agreat demonstration of the economic viability of installing and operating geothermal heatpumpsystemsonalargecommercialscale,intwoverydifferentstates,insteadofusingfossilfuelsforthesamepurpose.

25(GeothermalGenius,2015)


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Boyd,TonyaL.,AlexSifford,&JohnW.Lund.(2015).TheUnitedStatesofAmericaCountryUpdate2015.InCountryUpdates.Melbourne,Australia:InternationalGeothermalAssociation.Retrievedfromhttp://www.geothermal-energy.org/pdf/IGAstandard/WGC/2015/01009.pdf?

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EnergyInformationAdministration.(2015c).ElectricPowerDetailedStateData.RetrievedOctober7,2015,fromhttp://www.eia.gov/electricity/data/state/

EnergyInformationAdministration.(2015d).AverageResidentialPrice.RetrievedOctober23,2015,fromhttp://www.eia.gov/dnav/ng/ng_pri_sum_a_epg0_prs_dmcf_m.htm

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Lund,JohnW.(2015c).TypicalCostofGeothermalDirect-UseSystemsbyType[PhoneConversation].

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Williams,C.,Reed,M.,Mariner,R.,DeAngelo,J.,&Galanis,P.(2008).AssessmentofModerate-andHigh-TemperatureGeothermalResourcesoftheUnitedStates(No.2008-3082)(pp.1–4).U.S.GeologicalSurvey.Retrievedfromhttp://pubs.usgs.gov/fs/2008/3082/pdf/fs2008-3082.pdf


APPENDIXA:IllustrationsofGeothermalPowerTechnologyTypes AppendixA

IllustrationsofGeothermalPowerTechnologyTypes


Figure1:DrySteamPowerPlantConfiguration26

Figure2:SingleFlashSteamConfiguration27

26(Kagel,2008)27Ibid.


Figure3:BinaryPowerPlantConfiguration28

28Ibid.


APPENDIXB:State-SpecificGeothermalPotential

Arizona

California

Colorado

Idaho

Montana

Nevada

NewMexico

Oregon

Utah

AppendixB

State-SpecificGeothermalPotentialFactsheetSources:ElectricityandDirectUse(EnergyInformationAdministration,2015c)(Williams,Reed,Mariner,DeAngelo,&Galanis,2008)(EnergyInformationAdministration,2015a)(EnergyInformationAdministration,2015c)(USEPA,2015)(NationalRenewableEnergyLaboratory,2015)(ESRI,2014)(Meldrum,Nettles-Anderson,Heath,&Macknick,2013)–Forlifecyclewaterchartsinapplicablestates

FactsheetSources:HeatPumps(EnergyInformationAdministration,2015c)(EnergyInformationAdministration,2015e)(EnergyInformationAdministration,2015b)(EnergyInformationAdministration,2015d)

using geothermal energy to comply with epa’s …geo-energy.org/pdf/guides_2015/1-epa 111(d)_geo...

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